Exam 5: Strategic Capacity Management

If the best operating level of a piece of equipment is at a rate of 400 units per hour and the actual output during an hour is 300 units, which of the following is the capacity cushion?

Overtime and personnel transfers are solutions to capacity problems in the intermediate term.

The ultimate in plant flexibility is a one-hour-changeover-time plant.

When a firm's design capacity is less than the capacity required to meet its demand, it is said to have a negative capacity cushion.

The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of labor-intensive resources.

Capacity planning is generally viewed in three time durations: immediate, intermediate, and indeterminate.

In decision tree analysis, the time value of money is ignored because the only concern is with cash costs.

Outsourcing is a common source of external capacity.

Precise capacity design or the rate of service utilization (ρ), is application specific.

A piece of equipment with twice the capacity of another piece typically costs twice as much to purchase and to operate.

The ability to rapidly and inexpensively switch production from one product to another enables what are sometimes referred to as:

Best operating level is the volume of output at which average unit cost is minimized.

Capacity planning involving acquisition or disposal of fixed assets such as buildings, equipment or facilities is considered as which one of the following planning horizons?

The capacity focus concept can be put into practice through a mechanism called which of the following?

In designing a general service facility, capacity should be such that the target rate of service utilization (ρ), in order to get the best general purpose design, should be

Capacity planning involving consideration of production scheduling and inventory position is characterized by which one of the following time durations?

Which of the following models uses a schematic model of the sequence of steps in a problem and the conditions and consequences of each step?

Capacity can be defined as the ability to hold, receive, store, or accommodate.

In solving a decision tree problem, calculations start at the ends of the "branches" of the tree and work backward to the base of the tree.

A decision tree problem does not need probabilities or payoffs to generate a solution.